Managing expectations in the oil sector

Charles Wanguhu of Kenya’s Civil Society Platform presenting research findings on oil exploration in the country.

Nairobi, April 2016 – Kenya’s civil society is already training its sights on the country’s oil industry and asking some penetrating questions ahead of the anticipated production in the next few years.

At a recent media café organized jointly by Oxfam and the African Media Initiative, the Kenya Civil Society Platform on Oil and Gas (KCSPOG). presented to journalists the results of a survey that seem to suggest that the expectations raised by the oil find in Turkana County in northern Kenya are unrealistic.

Titled Protecting future oil revenues priorities in advance production, the research draws attention to issues around award of contracts and licences; regulation and monitoring of operations, collections of taxes and royalties, revenue management and allocation, and implementation of sustainable development policies and projects.

Presented by Charles Wanguhu of KCSPOG and Wairu Kinyori of Oxfam, the research shows that 27 parent companies own petroleum rights either as operators of joint venture partners in Kenya while others own rights either through tax haven subsidiaries, low tax jurisdictions or by using additional tax havens in their wider corporate structures.

To safeguard Kenya’s interests, the civil society platform recommends, among other measures:

Full disclosure of all existing production sharing contracts, operators, and joint partners;

A formal review of tax treaties and use of tax havens as well as government analysis of companies’ use of tax haven subsidiaries.

Responding to the presentation, AMI’s Chief Executive Officer, Eric Chinje, congratulate Oxfam and the civil society platform for what he described as a ground-breaking initiative.

“I have seen a lot of African publications, from Chad, Ghana, Mauritania, etc,” he said, “and I can tell you that, no country has done what Kenya is doing; when I say Kenya, it means what Charles and Wairu have done.”

He urged the journalists at the presentation to think hard about what they had just been taken through, pointing out that the research findings were not an ordinary report, but “the beginning of a long process”.

He told the journalists that they had a duty to manage citizens’ expectations. “Citizens need to get a sense of what we are doing,” he said. “People are seeing revenue already; they have a right to expect what we are doing; it’s for you in simpler language to make them know the position of this issue.”

Chinje, a former World Bank director of communications, said he had not seen any country where journalists were involved in such discussions at the very initial stage. As they got to understand the issues, he said, they would make a change in the country and as well as in the rest of the region.